Downtown San Jose gets game changer with Jay Paul development site

SAN JOSE — A move by stalwart developer Jay Paul Co. to buy a
pair of choice lots in downtown San Jose and pave the way for a
single mega-development is being viewed by some observers as a game
changer for the urban core of the Bay Area’s largest city.

“Seeing a developer of Jay Paul’s caliber in San Jose
emphatically demonstrates how downtown is reaching the next
level,” San Jose Mayor Sam Liccardo said in comments he provided
to this news organization.

Multiple deals by Jay Paul Co. give the prolific developer
ownership of three key sites that front on West San Fernando
Street, South Almaden Boulevard, Market Street, and Park Avenue in
downtown San Jose.

The most recent purchase by Jay Paul Co. added parcels near the
corner of Park Avenue and South Almaden Boulevard to the
developer’s bulging shopping bag of downtown properties. On June
7, Jay Paul bought the properties for $100 million from a venture
of local developer John DiNapoli and realty investment trust
Blackstone. CBRE, a commercial real estate firm, arranged the
purchase.

In July 2018, Jay Paul bought the big Cityview Plaza mixed-use
complex directly across the street on Park Avenue from the two
newly bought parcels.

It’s clear Jay Paul executives envision a close synergy
between the Cityview Plaza site and the latest acquisitions, which
include an old office building at 200 Park Ave. and a parking
structure at 282 S. Almaden Blvd.

“This is going to be a single development,” said Matt
Lituchy, chief investment officer with Jay Paul Co.

In addition to the proximity of the properties, Park Avenue
itself would be transformed into a pedestrian-friendly venue that
would encourage people to stroll along the thoroughfare and meander
through the future modern developments that would flank the
street.

“This is one of the best corners in all of downtown San
Jose,” said John DiNapoli, a long-time Silicon Valley who’s
active in the downtown and one of the sellers of the two parcels
near the corner of Park and South Almaden. “Jay Paul is planning
an incredible development.”

Cityview Plaza would potentially contain 3.4 million square feet
of office space, enough room for 17,000 to 23,000 workers, once
it’s redeveloped as a new tech campus. Possibly up to another
million square feet, perhaps more, could sprout in a tower
configuration on the recently bought properties across the
street.

“It’s a game-changer for what we consider the more
traditional downtown core,” said Bob Staedler, principal
executive with Silicon Valley Synergy, a land use consultancy.
“It’s going to take an underutilized pocket of downtown and
create true placemaking.”

The wide-ranging efforts by Jay Paul arrive at a time when
big-time players have embarked on major gambits in downtown San
Jose.

Near the Diridon train station and the SAP Center, Google plans
a transit-oriented village of offices, homes, restaurants, and
shops where 25,000 could work, including 15,000 to 20,000 of the
search giant’s employees.

Adobe intends to dramatically expand its three-building
headquarters campus on Park Avenue downtown by constructing a
fourth office tower on an adjacent lot on West San Fernando
Street.

Boston Properties, either by itself or in a venture with other
developers, is eyeing two giant tech campuses, one by the San Jose
Convention Center and Children’s Discovery Museum, and the other
near Diridon Station at the corner of West Julian Street and Autumn
Parkway.

Gary Dillabough, an up-and-coming developer with backing from an
array of tech executives and a WeWork co-founder, has been buying
numerous downtown San Jose properties, including the historic Bank
of Italy tower, hoping to revitalize a widening number of
sites.

Jay Paul Co., including completed property purchases and one
pending acquisition of an iconic office tower, has struck deals to
spend an eye-popping $659.5 million on five choice sites. That
means Jay Paul has spent more than the downtown San Jose purchases
of $319.5 million by Google and the $210 million by Dillabough-led
ventures — combined.

“We look forward to seeing tremendous architecture and design
transforming the skyline and streetscape of our city’s core,”
Mayor Liccardo said.

Source: FS – All – Real Estate News 1
Downtown San Jose gets game changer with Jay Paul development site